Notorious Sahota brothers sue alleged real estate fraudster over $2M loan
Two infamous Vancouver landlords have launched a legal battle against an accused real estate fraudster and another businessman, alleging an unpaid loan of more than $2 million.
Brothers Pal and Gurdyal Sahota filed suit in B.C. Supreme Court last month, accusing former real estate developer Tarsem Singh Gill and businessman Rajinderjit Bhela of unjust enrichment. A numbered company directed by Bhela is also named as a defendant.
According to the statement of claim, the Sahotas calculate they're now owed $3.85 million, based on an annual interest rate of 47 per cent.
The Sahotas allege they agreed to loan Gill and Bhela $1.53 million in March 2016, on the understanding it would be paid back within four months. They say they increased the amount to $2.03 million that December and extended the repayment date to June 2017.
But the Sahotas allege that Gill and Behla only made one interest payment.
Gill and Bhela have yet to file responses to the claim, and none of the allegations have been proven in court.
The lawsuit draws a line, connecting some of Metro Vancouver's most notorious businesspeople.
Along with sister Prakash, the Sahotas own several rundown single room occupancy (SRO) hotels in Vancouver.
In June, the city shut down the Sahota-owned Regent Hotel on East Hastings Street over unsafe conditions — a result of "many years of deplorable negligence by the owners," according to Mayor Gregor Robertson.
Another property, the Balmoral Hotel, had to be evacuated last year because of fears that it would collapse from water damage and rot.
Alleged $40M fraud
Meanwhile, Gill is accused of committing one of the largest real estate frauds in B.C. history. He faces fraud charges related to allegations he scammed nearly $40 million from 77 home buyers and 30 lenders in a complicated pyramid scheme.
It's taken a decade for those charges to reach the trial state. Gill was first charged in August 2008, but since then he has fired and hired multiple lawyers and avoided five trial dates.
He was set to finally face a judge in May 2013, but instead pleaded guilty to two counts of fraud. Gill was awaiting sentencing on those charges when he asked to withdraw his plea in January 2014, saying his judgment was clouded by depression.
A judge allowed him to retract the guilty plea, and a new trial date has yet to be set.
At one time, Bhela was a community organizer for the federal Conservatives, but the party reportedly cut ties with him earlier this year over concerns about a number of court cases alleging financial irregularities.
In May 2017, a B.C. judge issued a default judgment against both Gill and Bhela, ordering them to pay $500,000 in damages to TD Bank over what the bank described as a "sophisticated cheque-kiting scheme."
Cheque kiting is a form of fraud that takes advantage of the time lag for a cheque to clear in order to falsely inflate an account balance and write cheques based on non-existent funds.
With files from Paisley Woodward
